Better to be a client than an investor, I think.
Schwab Cuts Commissions, Sees Revenue Off
1 hour, 59 minutes ago Business - Reuters
NEW YORK (Reuters) - Charles Schwab Corp. (NYSE:SCH - news), the largest online brokerage, on Friday said it would cut online stock-trading commissions by 35 percent for small investors, the latest volley in a price war among brokers and a move that will reduce the firm's revenue.
U.S. investors with household assets of $50,000 to $1 million at the firm will now pay $12.95 per trade, down from $19.95, effective Feb. 8. The lower price also applies to clients who trade nine to 29 times a quarter.
The San Francisco company expects the pricing change to reduce its consolidated revenue by about 1 percent from current levels during the first 12 months.
Yet Schwab affirmed its target of generating a 25 percent pretax operating profit margin this year and at least a 15 percent return on stockholders equity.
The company said that during the second quarter it expects to unveil a comparable pricing for clients who trade through the 5,000 financial advisors affiliated with Schwab and who also enroll in electronic report delivery.
Traders making at least 30 stock or options trades per quarter, or those with more than $1 million in household assets will continue to pay $9.95 per trade. |
